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Edutech start-up Byju’s raises $30 million from Verlinvest

LiveMint 28-03-2017Sayan Chakraborty

Bengaluru: Education technology start-up Byju’s (Think and Learn Pvt. Ltd) has raised about $30 million from Brussels-based family office Verlinvest, in a move that will give the company significant firepower to expand business, two people aware of the development said.

Quotes in the article

“Verlinvest is coming in at a higher valuation than the last round, at about $600 million. Byju’s is one of the few education technology start-ups to have scaled significantly in the last 18 months, which has helped the company stoke interest in global investment firms,” said one of the two people cited above on condition of anonymity.

Verlinvest, founded in 1995, manages assets of over €1.4 billion, according to its website. The firm has invested in consumer companies in sectors such as digital and e-commerce, food and beverages, retail and hospitality and education. The firm’s investments in India include winemaker Sula Vineyards, speciality food maker Veeba Food Services Pvt. Ltd, Drums Food International Pvt. Ltd, the maker of Hokey Pokey ice-cream and Future Consumer Enterprise Ltd.

Byju’s confirmed the development, but did not comment on the quantum of funds and valuation.

“Our partnership with Verlinvest will further boost our aspiration to change the way students learn across the globe. In the last 18 months, we have witnessed exponential growth in India. While these numbers are very exciting, there is a long way to go before we can call it a revolution. The fact that we are still reaching to less than 1% of the student population, shows the immense potential and the impact we can create,” founder Byju Raveendran said in a statement.

Byju’s latest fundraising comes after investment in Indian start-ups plummeted by almost one-third last year from the heydays of 2015 and 2014, when venture capital firms queued up to invest at high valuations.

According to a report by KPMG and CB Insights, Indian start-ups raised $3.3 billion in 2016 across 859 deals, as against $8.2 billion across 890 deals in the previous year.

The slowdown in funding has also prompted many start-ups to shut shop or sell out to larger rivals. According to Tracxn, a start-up tracker, as many as 212 start-ups had shut shop in 2016.

To be sure, Byju’s has been one of the few growth stage start-ups to have raised multiple rounds of funds in 2016, apart from food tech start-up Swiggy (Bundl Technologies Pvt. Ltd).

The company had raised about $75 million from Sequoia Capital and Belgian family office Sofina in March 2016. In September, Byju’s raised $50 million in a round led by Chan Zuckerberg Initiative, becoming the first Asian investment for the personal fund set up by Facebook Inc. founder Mark Zuckerberg and his wife Priscilla Chan. In December, the company raised another $15 million from World Bank arm International Finance Corp.

Byju’s also raised an undisclosed amount in venture debt from InnoVen Capital. Besides, Lightspeed Venture Partners invested about $20 million in the firm earlier in 2016 in a secondary transaction which saw Aarin Capital partially selling its stake.

This takes total capital infusion in Byju’s last year to at least $160 million. The company, founded by Byju Raveendran in November 2011, has so far raised close to $200 million in equity and debt funding since inception.

Byju’s provides learning programmes for class VI to XII students and preparation programmes for competitive examinations such as JEE, CAT, IAS, GRE and GMAT, among others. Byju’s plans to expand globally, especially in the US and UK, introduce new subjects beyond physics, chemistry, biology and mathematics as well as roll out products for classes IV and V, Raveendran said in an interview in September.

Byju’s business model has undergone a significant change in the last one year, from a classroom-based model to an app-based one. Ravindran claimed in the interview that Byju’s app had more than 5.5 million downloads in the 12 months to September 2016, of which 250,000 consumers were paid annual subscribers.

As per data platform Tofler.in, Byju’s clocked revenue of Rs110 crore in the year ended 31 March, 2016, with a net loss of Rs50 crore.